For the third time since mid-October China announced an increase in interest rates Tuesday, in an effort to curb inflation.
The move is widely considered a sign that Beijing will do whatever is necessary to keep a lid on food prices. In China poor families can spend up to half their incomes on food.
Also Beijing is keenly aware that the rapid increase in the price has food has been a trigger for violence in other parts of the world.
However, the move triggered worry that in its quest to temper food prices, Beijing could stymie growth.
According to China expert David Riedel of Riedel Research although inflation is challenging for China’s poor it may actually benefit China’s growing middle class by generating higher wages.
He says play the trend on the side of the Chinese consumer. “Consumers are still going to have money to spend and they're going to spend it, especially if they're worried about inflation accelerating.
In other words Chinese consumers will buy things now, on expectations that prices will go up later.
How does an American investor play it?
Riedel tells the desk he’s a buyer of US listed Chinese companies that provide exposure to consumer durables such as Sohu and Lihua.
> EXCLUSIVE: Huffington Talks AOL Deal> SLIDESHOW: A History of AOL Acquisitions
______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.
Trader disclosure: On Feb 8, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour owns (AAPL); Seymour owns (BAC); Seymour owns (F); Seymour owns (FXI); Seymour owns (TM); Terranova owns (VRTS); Terranova owns (C); Terranova owns (UPL); Terranova owns (GM); Terranova owns (PEP); Terranova owns (LTD); Terranova owns (CVI); Terranova owns (SU); Terranova owns (CNQ); Terranova owns (POT) puts; Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman's firm is short (IJR); Finerman's firm is long S&P puts; Finerman's firm is long Russell 2000 puts; Finerman owns (AAPL); Finerman's firm owns (AAPL); Finerman's firm owns (AVP) calls; Finerman owns (BAC); Finerman's firm owns (BAC) leaps; Finerman's firm owns (BBY); Finerman owns (C); Finerman's firm owns (GLW); Finerman owns (GOOG); Finerman owns (HPQ); Finerman's firm owns (HPQ); Finerman's firm owns (IBM); Finerman owns (JPM) ; Finerman's firm owns (JPM) and (JPM) leaps; Finerman's firm owns (MCD); Finerman owns (MSFT); Finerman's firm owns (MSFT); Finerman's firm owns (TGT); Finerman's firm owns (WMT); Finerman's firm owns (FCX) puts; Finerman's firm owns (DAI); Weiss owns (AAPL); Weiss owns (FAS); Weiss owns (GLD); Weiss owns (JPM); Weiss owns (HBAN); Weiss owns (BTU); Weiss owns (MEE); Weiss owns (TBT); Weiss owns (UUP); Weiss owns (CSCO); Weiss owns (QCOM); Weiss owns (VZ); Weiss owns (TXN); Weiss owns (MSFT); Weiss owns (FWLT); Weiss owns (SHAW)
For Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LPHI)
Virtus Investment Partners Owns More Than 1% Of (NRCI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLF)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of (DPUKF)
For Brian Kelly
Accounts Managed By Kanundrum Capital Own (BAC)
Accounts Managed By Kanundrum Capital Own (MCP)
Accounts Managed By Kanundrum Capital Own (MS)
Accounts Managed By Kanundrum Capital Own (IAU)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (RDC)
Accounts Managed By Kanundrum Capital Own (ATW)
Accounts Managed By Kanundrum Capital Own (DO)
Accounts Managed By Kanundrum Capital Own USD
Accounts Managed By Kanundrum Capital Own (JEF)
Accounts Managed By Kanundrum Capital Are Short The Yen
For Barry Ritholtz
Ritholtz has no disclosures
For David Riedel
Riedel has no disclosures
For Eric Noll
Noll has no disclosures
For Scott Nations
Nations has no disclosures
For Amelia Bourdeau
Bourdeau has no disclosures
Comcast is the parent company of CNBC
Comcast is the parent company of NBCUniversal
GE owns 49% of NBCUniversal
GE owns 49% of CNBC
CNBC.com with wires.
